France attempts to impose e-book prices on Apple, others

French legislators have passed a law allowing publishers to set a price that …

Sorry, Apple—French publishers will set the price you can charge for their e-books, according to a new French law.

Passed last week by both houses of the French parliament, the new law updates France's 1981 "Lang Law" setting prices for paper books. Under that law, publishers could print their price on the back cover a book and every bookstore in the country had to sell it for about that price. A tiny 5 percent discount was the maximum allowed by law, as Amazon found out years ago when a judge held it liable for violating the Lang Law by offering free shipping on its books. (This amounted to more than 5 percent off the list price.)

The new law brings that principle into the digital age, but with a twist: it attempts to apply itself outside France, as well. Under the new scheme, it is publishers who will set a single price for their e-books, which distributors must follow. So long as the publisher is French, distributors must abide by the list price even if based elsewhere.

The point of such laws is to keep prices up in order to fund French culture and insulate it from the ruthlessness of the market. It also provides a level playing field for retailers; mom-and-pop booksellers can compete even with the largest of hypermarchés, since everyone's selling at the same price. The downside for book buyers, of course, is that books don't go on sale.

Still, French politicians love the law. As MP Christian Kert put it last week, "Must we recall how the regulation created by the Lang Law has helped ensure cultural diversity and editorial creativity, accompanying the almost continuous growth of the market of French books for thirty years? … We also know that book prices are favorable to the public."

This is essentially the "agency model" written into national law. Booksellers in the US forced Amazon to adopt such a model, where the publisher—and not Amazon—sets the sale price, and similar pricing laws exist for paper books in other European countries like Germany. Apple uses such a model, too.

But France is the first to throw the law at e-books, and it's quite pleased with that fact. "I am happy, as we all must be tonight, that our gathering is prepared to vote definitively on what will be the first such law in the world for digital books—a pioneering text in our ever-changing world," said MP Hervé Gaymard last week as a joint parliamentary commission presented its final version of the bill text.

French Culture Minister Mitterand said that "the book remains a unique cultural artifact, irreducible to a solely commercial dimension… Thirty years after the Lang Law on book prices, here is founding legislation for the book trade and the regulation of cultural industries in the digital age."

And he expressed his firm belief that "the editor should to be able to control the value of the book, regardless of the location of the distributer. I am therefore delighted that the balance struck by the joint committee allows distributors in France of playing on equal footing with those outside our borders."

This raises obvious questions, including: is the EU really going to let this happen? Not even France knows. At yesterday's e-G8 meeting on intellectual property, Mitterand expressed his hope that France's "European friends" would not interfere.

But as Publishing Perspectives noted back in March, the European Commission has already raided French publishers on suspicions of e-book price fixing. And trying to impose French law on non-French distributors raises huge legal questions that France hopes to massage away under the EU's "cultural exception" (national laws deemed necessary to protect local cultures can sometimes avoid EU scrutiny).

Once the book store buys the book, it owns that copy. Why should anyone else be able to dictate what the book store does with the copy? This is more anti-competitive French bull-merde, probably a result of heavy lobbying by the book industry thinly disguised as preserving culture.

And were is the price printed on an ebook? And pirated versions have no price so is it ok to pay that amount? Is anyone who doesn't pay the full price of the book then a "pirate", since the only difference between "piracy" and "honest and lawful" is paying exactly retail plus shipping?

You know, this same situation keeps popping up every now and then. I think at this point, companies should stop trying to negotiate with France and instead just pull out of France. Let the government see how long they can stay in office when people suddenly can't get some things they enjoy anymore.

Actually, it was *Apple* that forced Amazon to adopt the agency model. The book publishers always wanted that model (or most of them, anyway), but Amazon refused. It was Apple's adoption of that model that forced the issue.

I'm a bit confused by this... Didn't Apple already offered the "Agency Model" in their e-Book store? I remember a lot of anger going around the fact that the iBooks store meant an increase in the price of e-books.

How about France gets its own nationwide LAN, and we on the "outside" don't get annoyed by French wannabe-Internet-Napoleons on a regular basis? Bon?

I doubt the French give a shit about what they see as the Anglo Saxon world's opinion of their laws. This law will undoubtedly mean higher prices for consumers but it will mean the Market doesn't end up as a duopoly.

Actually, it was *Apple* that forced Amazon to adopt the agency model. The book publishers always wanted that model (or most of them, anyway), but Amazon refused. It was Apple's adoption of that model that forced the issue.

Apple has sold its computers this way for as long as I can remember. 3rd party resellers would have to sell at Apple's price. They would throw in extras like free printers to compete. Schadenfreude I guess.

Just dont buy overpriced ebooks. I refuse to buy an ebook for more than the cost of the paperback version new. We can break the publishers resolve by simply not buying any ebook over a given cost. I personally use the old amazon $9.99 limit myself. Like the old saying goes," Everything is worth exactly what somebody will pay for it." Publishers know this and set prices where ebooks sell. As far as French Law goes , well I bet this one gets tied up quite a bit.

"the editor should to be able to control the value of the book, regardless of the location of the distributer. I am therefore delighted that the balance struck by the joint committee allows distributors in France of playing on equal footing with those outside our borders."

At first glance, I was shocked at the audacity of a company to have such complete worldwide control over their products even after they have been sold.

Then I remembered that companies all try to price their goods based on the income level of the population. A previous Ars story highlighted how Omega would love to sell its watches at a huge markup in the USA and closer to cost in poorer countries. With laws in place that allow a company to control overseas pricing and distribution, they can easily do this while making grey-markets illegal.

If anything, French publishers would be best off setting a different price per country proportional to the median income rather than setting a single global price. It's not like they have costs involved with each ebook copy...

Actually, it was *Apple* that forced Amazon to adopt the agency model. The book publishers always wanted that model (or most of them, anyway), but Amazon refused. It was Apple's adoption of that model that forced the issue.

Apple has sold its computers this way for as long as I can remember. 3rd party resellers would have to sell at Apple's price. They would throw in extras like free printers to compete. Schadenfreude I guess.

Yeah, i think you are kind of right here. Though curiously enough, for us Mexicans, that actually meant a price reduction on appleware. Years ago, Apple computers, iPods and the like, as you can imagine, were a super niche, so few specialized stores had them. That meant that they could jack up the prices a lot and you had to look around in the few places that sold them for the best price.

Once Apple started having more of a retail presence, prices got standarized and now the only thing actually keeping Apple things more expensive than the US are our taxes (16%) and some times when stores wan to offer a 12 months payment option... that usually jacks up the price another 10%. At least in most cases... The downside is that yes, there is little to no discounts, save for a few and far apart storewide promos, like at Sams.

Actually, it was *Apple* that forced Amazon to adopt the agency model. The book publishers always wanted that model (or most of them, anyway), but Amazon refused. It was Apple's adoption of that model that forced the issue.

Rather, Apple forcing Amazon to adopt it if it wanted Kindle to stay on iOS. It was an underhanded business move if there ever was one.

While France's ignorant attempts to "protect its culture" are usually reprehensible, this is not a big deal. Ebook sellers are really nothing more than payment processors, so it makes no sense for them to have a say in pricing. They don't have physical inventory that they paid for, so they have no stake in setting a price other than what the publisher wants.

I don't get why this is supposed to be an imposition on Apple? As the article says, the iBookstore already uses the agency model where publishers set the price of their goods and the retailer takes a percentage. So this simple traps Apple into using the model it prefers to use for books, music, apps, etc.

Seems like more of an inconvenience for Amazon, since they never wanted to use agency pricing and now they can't ditch it without losing French suppliers.

It's like they're trying to make us look good or something. Between this and the e-G8 crap...

The level of absurdity with this type of law is... mind blowing. I'm not familiar with French law, so I'll apply US law to it. Excuse me if I'm out of line. I buy the book from you to resell it. This law states I can't resell it for less (or more!) than the cover price. My customer purchases it. The warehouse containing every other copy of the book goes up in flames, the author is shot, his computer explodes. My customer now has the only copy in existence and it is deemed a masterpiece. The Smithsonian wants to purchase it, but the law says my customer can only sell it for... cover price?

Perhaps my understanding of socialism is a little rusty, but while this law appears to be blatantly anti-consumer, I don't see how it involves state control of businesses.

The state is letting businesses force other businesses to act in a certain manner. However, applying existing political/economic models to 'IP' generally doesn't work well, especially since the concept isn't really in line with capitalism, communism, or socialism.

I'm am still a little confused on how Amazon ran foul of the law simply by offering free shipping. Shipping =/= list price (though it might be considered). Does this mean that French sellers add international shipping to their costs at the register? Logically I would assume that Amazon would offer at a competitive price and might need to adjust a few items to keep within the 5% listed (they might move to straight list price, fine), but shipping (and VAT) would be extra.By the same token, I can easily see ebook prices moving that direction as well - though I would love it if everyone could suddenly see the multitude of prices:French: 29.99Anywhere else: 9.99

How about France gets its own nationwide LAN, and we on the "outside" don't get annoyed by French wannabe-Internet-Napoleons on a regular basis? Bon?

I doubt the French give a shit about what they see as the Anglo Saxon world's opinion of their laws. This law will undoubtedly mean higher prices for consumers but it will mean the Market doesn't end up as a duopoly.

IMO it's rather impolite for France to go around making laws the apply to the whole world. Refusing to hear the world's opinion on such laws is downright rude.

If they want fixed book prices within France, fine (although I don't think this will help small stores vs big stores as much as they hope), but book prices outside France are none of the French government's business.

Just dont buy overpriced ebooks. I refuse to buy an ebook for more than the cost of the paperback version new. We can break the publishers resolve by simply not buying any ebook over a given cost. I personally use the old amazon $9.99 limit myself. Like the old saying goes," Everything is worth exactly what somebody will pay for it." Publishers know this and set prices where ebooks sell. As far as French Law goes , well I bet this one gets tied up quite a bit.

I will one up you on that. I refuse to buy ebooks if they cost more than 5-6 dollars. The ebook simply is not worth more than that. If I want the dead tree version I may buy it for 9-12 dollars at the most or simply wait for it to be on sale somewhere.

The problem is letting publishers sell ebooks at all. Authors should be selling the books they write in the digital format.

Yes, some authors are funded by publishers while they write books. In those instances, of course the publishers get a cut of the profits.

But there are many authors who write independently, and then look for publishers to print and distribute their content. If these authors sell direct to digital, then they negate the need for publishers for their digital copies.

There is no cost to print and the content is the author's own. ebooks should cost 1/3 the price of the print copies because less the middle men dipping their hands in. The reason ebooks cost so much is publishers inflating prices to keep their print copies price competitive.

I don't get it. Why does the original publishing company have ANY say on what I sell a book for? If the publishing company wants more money, then just raise the wholesale price. The end retailer should decide at what price to resell the book (or any product) and how much of a profit or loss it wants to have in the end sale.

I'm in favor of Amazon and Apple dropping French books. Lets see how they fair in the market without access to the biggest eBook platforms.

Yeah, like Apple or Amazon is really going to drop a market of about 60 millions people... That'll teach those silly french, hur, hur...

First of all, French people don't have to buy French books. Secondly, the point is that the French book industry needs Apple/Amazon more than Apple/Amazon needs the French book industry. If France starts pushing you around, you break their nose and tell them to go shove a baguette up their ass before they try to pull that idiocy again.